New economic team a 'ridiculous idea'

New economic team a 'ridiculous idea'

President Abdurrahman Wahid's plan to set up another team of
economic advisers has received mixed reactions. Hadi Soesastro, a
noted economist from the Centre for Strategic and International
Studies, is one of those who disagrees with the plan.

Question: How do you view the President's plan for the new team?

Answer: I think Gus Dur (Abdurrahman) is worried about the performance
of his economic ministers. But the plan to set up a new team is a
ridiculous idea. Why should the President take an initiative to
set up a team to support his ministers?

This team will be different from the existing councils, like
the National Economic Council (DEN) and the National Business
Development Council (DPUN), which assist the President.

Should he feel the need to strengthen matters relating to
policy making and implementation, he could put the new team as
part of his presidential office, either under the state secretary
or the Cabinet secretary. As part of the presidential office, it
would have the authority to summon ministers.

Q: Is his concern about the poor performance of his economic
ministers well-founded?

I think most people agree with this assessment.

A: But they have not been even five months in office and the
economic mess left out by the past regime was chaotic?

It is true, but there are things that could have been done in
the period of five months and they were not done. Things like
banking restructuring at IBRA (Indonesian Bank Restructuring
Agency) and bad corporate debts.

Paul Volcker (former chairman of the U.S. Federal Reserve)
describes the current situation best when he said that below the
President there was no leadership.

The President may have performed well, has the support of the
people but policy implementation is another thing.

Q: But isn't IBRA heavily politicized and that might have
hindered the economists?

A: I don't think so. If they could sit together and agree on what
should be done first, things could have started moving.
Especially now that the Financial Sector Policy Committee (FSPC),
chaired by Coordinating Minister for the Economy, Finance and
Industry Kwik Kian Gie, is in place. Should the IBRA chairman
encounter difficulties, he could always bring the matter to the
committee.

Q: The establishment of the new team apart, is there really a
need to set up the team?

A: There is no need to set up the team. If one could talk to Pak
Kwik very thoroughly and with good intentions, we should be able
to get over the problem.

Q: So, it seems communication is a problem.

A: There are a lot of complaints, not only from businesspeople
but also from representatives of foreign finance institutions.
They were dismayed by the difficulties to meet (with economic
ministers). And if they did meet with them, their grievances were
not appropriately addressed.

Some foreign businesspeople said they understood the demerits
of a compromised Cabinet, but were confused when ministers from
the same political party had opposite statements.

Bank Indonesia and the Ministry of Finance, for example, do
not see eye to eye. The bank officials and Pak Kwik play cat and
mouse.

Q: What if a communication problem persists?

A: Many say that we can't wait until August (when the People's
Consultative Assembly convenes to assess Gus Dur's performance).
The economic condition will remain stagnant but perhaps it won't
decline to a critical level.

But if economic recovery is delayed, the burden keeps on
piling and the cost of bank recapitalization keeps on increasing.

In fact, the crisis did not only bedevil the economic
ministers but the whole government. What about the rampant
looting on plantation and mining sites? This is a deterrent to
prospective investors.

Q: Where does the factor of people's high expectations for
economic recovery fit in the equation?

A: I doubt that it has something to do with the people's
patience. There are some parties who are fanning the people's
emotions. How could you explain the heavy equipment used by
illegal diggers (in mining sites)? We urgently need firm action
from Jakarta, but there is none so far.

Q: Senior economist Sarbini Soemawinata recently said Gus Dur
rules the country the way he leads a pesantren (Muslim boarding
school)...

A: The question is should we suit ourselves to his style or him
to us?

Q: Do you think he should change his style?

A: Of course. He should stop his penchant of making policy
statements, most of the time without the knowledge of his aides.
That's not a president. He seems to act in the way he has always
been: a kiai (Muslim scholar). If a statement proves wrong, he
lightheartedly revokes it. But in the meantime, the damage has
been done. He has to consult his aides before making a public
statement.

His recent meddling over Bank Indonesia's governor is a case
in point. Perhaps he does not like (governor) Syahril Sabirin; it
is too bad if he doesn't like him, but by no means he should
undermine his position because the law does not allow this to
happen. It gives the impression that all is being enforced from
above. How then does he differ from Soeharto?

Q: Isn't it a learning process?

A: I hope so, but does anybody dare tell him about that? (hbk)